PE funds pump $3.8 billion into Indian real estate

With banks and NBFCs turning their back on real estate, private equity funds are coming to the rescue of the cash-starved sector. On the backdrop of the liquidity squeeze, private equity funds have invested $3.8 billion in Indian real estate in the first nine months of the calendar year, 19% higher than the $3.2 billion invested during the same period a year ago. That’s 19% higher than the investment of $3.2 billion during the same period a year ago, according to ANAROCK Property Consultants data. Most of it went to commercial real estate and close to half to Mumbai. Investment in the National Capital Region (NCR) however declined. As much as 95% of the money, or $3.6 billion, flowed in as equity investment at a time when other financiers are either avoiding exposure to the sector or have increased the risk weight associated with it. The remaining 5% was in the form of structured debt. “Commercial real estate continues to be the hot investment target for private equity investors in 2019 and the trend will most likely continue in the quarters ahead,” said ANAROCK Capital managing director and CEO Shobhit Agarwal. “To add to it, the success of India’s first Reit (real estate investment trust) is a major draw for global investors who are keen to capitalise on the country’s high demand for Grade A commercial real estate.”